Payday Loan Costs: How Much Will It Cost Me?

Before you submit your signed payday loan application, you must submit a post-dated check to your lender in the full amount of the loan plus a finance fee that you and your lender agree upon. This finance charge varies from state to state, depending on usury restrictions on lenders and legislation within the state. Finance charges on payday loans are short-term rates that must be paid back in full (along with the loan) by the borrowers’ next payday. By doing this, borrowers avoid accrual of finance rates and prevents them from entering into a cycle of debt and despair, and possibly unhealthy ways of releasing stress.

Cash advance stores and online payday lenders have nearly identical guidelines on rates that are followed in order to protect the borrower. When applying online, borrowers fill out brief applications with their personal information, such as their bank account number and employer information. The application is easy and takes only minutes to complete, while approval is instant and the money in advance you need can be deposited in as little as one hour. This accelerated process does NOT increase your payday loan costs in any way. Cash advance stores and online payday lenders alike follow similar guidelines (legislation) from exceeding the set usury rate in the state in which the money is borrowed. Always remember to do your research before committing to a payday loan; there is absolutely no need to rant or feel pressured. Because payday loan costs depend upon fluctuating rates, it is important to find out the guidelines that are in place in your state before securing a payday loan.